Transcript

1.
Innovation Best Practices

2.
Senior Leadership communication across the organization
about the importance and emphasis of innovation is critical
Should we consider fielding our own internal Pulmuone study to see where we are?
The People Ready Business Whitepaper, Roadmap for Innovation Success Report

3.
A recognition that ideas can come from
everywhere not just Marketing

4.
The three platform areas of Taste & Variety, Health &
Wellness and Convenience continue to be what
consumers desire

6.
Truly delivering on Consumer Needs/Wants is important
First & Second Moment of Truth
First Moment of Truth:
"Packaging That Sells" is key
UK Pringles learned that brand
recognition tied to package shape
• 69% recognize Pringles with
packaging shown in picture
• 67% recognize Pringles without
Pringles man
• 9% recognize Pringles without
carton-shaped package
In 2002, P&G decided to launch Pringles chips
with jokes, pictures and trivia printed on them
Second Moment of Truth:
Experience drives re-buy
P&G invited heavy Pringles users to a computer
and online gaming event to understand their
specific product needs
• Product tests while gaming
They learned that Pringles consumption tied to
product handling and grease slid from fingers to
console
• Chips should not grease fingers
• Chips should be accessed without moving the
eyes from the screen
After the study, P&G has announced an
agreement that teams Pringles with G4, the
Comcast-owned cable TV network dedicated to
video games and the video game lifestyle
In 2003, Pringles did in-store promotions, online co-branding
and POP displays together with G4
Source: P&G Internal Documentation; BCG analysis
• Three-year deal worth more than $2 million
• Launch of "Cheat! Pringles Gamers Guide," a half-hour
weekly show offering viewers tips on how to get through
challenges in video games

7.
Project portfolio analysis provides
health check of existing pipeline
Approach
Financial attractiveness
Very high
Build portfolio of current projects
• Determine financial attractiveness and feasibility as
detailed in Idea Management
• Represent planned PD expenses as bubble sizes
(excluding past expenses/sunk costs)
Review "health" of current portfolio – address key
questions in management dialogue:
• Are we investing enough in our most important
projects?
• Do we fragment our resources across to many
projects in parallel?
• Do we face "congestion" in our project pipeline?
• Is our average time-to-market acceptable or do we
miss windows of opportunity?
C3
C5
High
C4
Projects to pursue
with high priority
Medium
C2
Projects to pursue
if resources are available
and overall targets
not met without them
C1
Low
Projects not to
pursue further
Guidelines from top-management for portfolio
prioritization and resource planning
Very Low
Very low
Low
Current projects
Innovation Best Practice Resources, January 2011 BCG
Medium
High
Very high
Feasibility

11.
How do you judge yourself with
respect to innovation management?
Key strengths
1
2
3
4
Clear and defined innovation
strategy
Enough ideas to support your
innovation strategy
Regular and adequate top
management involvement in
innovation process
Disagreement within the organization
1
3
Major milestones (4/5) in innovation
process to review status of project
Organization/culture that rewards
entrepreneurial freedom and allows
mistakes
5
Innovation Best Practice Resources, January 2011 BCG
Transparency/overview of the
innovation pipiline and the status of
each project?
Prioritization of projects is
determined by transparent criteria
in a formalized way across all
brands?
Quantification of "business
potential" of each idea?
Standardized documents accompany
the process to exchange key
information among team members?
Project champion with adequate
power to control and manage a
project across all functions?
1
Innovation process too long
2
High level of local developments for
local needs (too high?)
3
Lack of transparency of innovation
process
4
2
4
5
Weaknesses
Organizational structure seems to
inhibit the marketing strategy
5
Inefficient/low usage of external
sources to generate ideas
6
Low reliability towards trade
concerning launch dates of new
product

12.
Following a clear and simple
stage gate process is also helpful
Idea generation
Actions
Ressources
• Purchasing simulations
in own locations and
core regions
• Annual category
studies, focus groups
• Consumers
accompanied 12
hrs./day for 1 mo.
• Regular meetings with
"idea generating
companies"
• Cross-category and
cross-country
innovation meetings
Brand manager/ director
for new products
Preparation
• One- and multidimensional concept tests at
POS
• International concept
and market tests
• Feasibility studies
• Estimation of market
potential
• Preview tests of new
products by retailers
• Supplier involvement
in development of
new materials and
ingredients
Category Planning Team
(3 FTE: brand manager,
market researcher,
engineer)
Decision
• Internal benchmarking
of new products
relative to existing
portfolio, corporate
targets and strategy fit
(own database)
• Quality and product
use tests by
consumers in their
homes
• Financial business case
(NPV)
Decision Team
(GBU Leadership Team,
R&D Functional Leadership
Team)
Implementation
• Supply concept and
production
• Marketing concept,
“go-to-market”
strategy, advertising
readiness
• Clear milestone and
action plans for all
kind of contingencies
when product is
launched
• Regulatory application
• Training and deployment of sales force.
Program Team
(several FTE from market
research, production,
supply chain, sales,
marketing, law, finance)
“It was clear that we did not know how to do it. There were lots of evidences of teams doing the right things... the
right market studies, superb product development and testing, and so on. The issue was one of consistency. We
did some plays well, some projects, some of the time. But that is not how you win the Championship year after
year”
- Senior P&G executive
Source: Expert interviews; BCG analysis

14.
Understanding the Customer key planogram windows
can help improve innovation execution
•
Top customers (i.e. top 10/15) typically introduce or cut in new items at planogram
timing. Planogram timing over the years has reduced at many customers to once
a year due to the resources involved with changing the sets.
•
Mars Foods has two primary launch windows a year:
First half of the year launches:
– April – Decisions are made at leadership team level of go/no go launches for first half of the following
year.
– June/July – Samples to sales force for January launches (6 months advance sell in)
Second half of the year launches:
– October/November – Decisions made at leadership team level of go/no go launches for back half of
the following year.
– January/February – Samples to the sales force for July launches (6 months advance sell in)

16.
Active monitoring determines product innovation success
•
Initial launch reviews take place 12 weeks, 6 months, 9 months and one year after launch
– Later reviews happen every 6-12 months
•
Results are reviewed by cross-functional teams and include senior management involvement
to highlight relevance of process
– A number of indicators are tracked
• market share and consumer behavior
• sales both for the product and for the category as a whole (consider cannibalization
and/or real category growth)
• EBIT performance
• return on investment (ROI)
– Performance is evaluated vis-à-vis business plan and supporting materials used during
decision-making phase
•
Review
sequence
Under performing launches are put under close watch (“kill or cure”)
– Usually given a defined period of time to design and implement turnaround measures
– The decision to withdraw new products can be taken from as early as 6 months after
launch
• usually “kill” decision is followed by an orderly withdrawal plan to avoid channel
conflict
KPIs
Sanctions
Enables transparent risk management for everybody
Source: BCG interviews; public information about P&G; BCG analysis

18.
Pulmuone Foods USA, Inc.
Innovation Vision & Mission
Pulmuone US Situation Analysis Summary
Implications
Consumer Trends:
 The Boomer generation is getting older
Consumers:
 Asian & Hispanic populations are on the rise
Change is implicit, identify and react quickly
 Households are decreasing in size
Build competence in convenient, portion controlled
items
 Generation Y is coming into prominence
 Ethnic foods are quickly emerging into the mainstream
 Convenience factor is still important given busy lifestyles
 Consumers have defined that they want ‘wholesome’
foods, not foods to treat specific disease states
 With global obesity crisis, focus on healthy eating is more
important than ever.
Competitive Trends: Leverage Mega Brands
 Consolidation of brands into top 15 food companies
 Acquisitions have led to new segment opportunities and
capabilities
 Pasta competitors are crossing over into different
temperature states
 Restaurant/Chef inspired brands translating to Retail
Customer Trends: Focus on own label
 Increased pressure by retailers becoming their own
marketers and creating mega brands that cross
categories and temperature classes
 New alternative retailers filling needs of consumers desire
for fresh, prepared, healthy products
Competencies: Needs Gap
 Largest Pesto manufacturer in the U.S.
 Tofu expertise – U.S. and Korea
 History and Track record in understanding Fresh
Vision
Authentic Wholesome Foods
Pulmuone will make healthy, delicious
food that our consumers will be proud to
serve their families.
Focus on how to win in ethnic – Asian and Hispanic
targeted offerings
Significant economic pressure leads consumers to look
and challenge their definition of value by brands
Competitive
Increase partnership competencies to leverage brands
into new temperature classes and increase presence
across categories
Need to have broader appeal to Generation Y and
early adopters to build cache and awareness for a
lifecycle
Mission
Create products that consumers and
customers regard as their partner in
leading fuller, healthier lives
Consumers will consider our products as
combinations of great taste, health and
convenience that enable them to feel
good about their purchase as they nourish
their mind, body, soul, and values
Customer
Be nimble and flexible to take advantage of customer
private label opportunities where appropriate.
Competencies
Identify ways to increase usage of Pesto
Identify ways to introduce innovation to Tofu to help it
become more widely accepted by US consumers
Leverage the right partnerships/alliances to extend
capabilities in the proper adjencies.
Key Strategies
Create new value for existing brands via Renovation &
Partial Innovation
Develop and leverage borrowed technologies/capabilities
from Pulmuone corporate in Korea
Creation of expanded market space with breakthrough
ideas and entry into larger categories
 Fresh pasta/sauce manufacturing
Expansion of target consumers with focus on emerging
growth areas (Kids, Gen Y, Asians, Hispanics and Aging
Baby Boomers)
 Open to alliances and partnerships
Enhance internal capabilities - Gilroy
 Pulmuone does not have core competency in Frozen or
Ambient
Enhance brand building and marketing competencies
 Certified Organic positioning
 Pulmuone weaker in the area of branding/Marketing

28.
The basic process architecture established a common
set of stages and stage decisions
Learning loop
Creation
Idea
brief
SD1
Assessment
SD2
Program
charter
Research
charter
Dedicated program
team formed
Source: BCG interviews; public information about P&G; BCG analysis
Development SD3
Preparation
AR signed
SD4
Launch
SD5
First launch
Evaluation
Audit review

29.
These are defined by key decisions
Learning loop
Creation
SD1
Assessment
SD2
Development
Dedicated program
team formed
Stage decisions
• Creation of
Program
Team, given
prioritization
• Approval of
contract for
next stage
• Business case
is proven
• Commitment
to target
launch timing
• Approval of
contract and
resources for
next stage
Source: BCG interviews; public information about P&G; BCG analysis
SD3
Preparation
SD4
Launch
AR signed
• Product
definition is
frozen
• Commitment to
launch volumes
• Approval of AR
submission
• Approval of
contract and
resources for
next stage
SD5
Evaluation
First launch
• Agreement to
start
production
• Commitment
to launch plan
• Approval of
contract and
resources for
next stage
• Approval of
rollout plan
for future
markets
• Decision on
scope and
timing of
evaluation
• Define when
Program
team ends
Audit review

33.
The program team/extended team is responsible for
executing on the program
Category
planning
team
Program
charter
Decision team
Learning loop
Creation
SD1
Assessment
SD2
Development SD3
Preparation
AR signed
Program team
Source: BCG interviews; public information about P&G; BCG analysis
SD4
Launch
SD5
First launch
Evaluation
Audit review